Digital Euro Moves To “Preparation Phase,'' ECB Says

Digital Euro Moves To “Preparation Phase,” ECB Says

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Updated: 19 October 2023

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The European Central Bank (ECB) said yesterday that its digital euro project will move into a ”preparation phase” next month.

This phase is expected to last two years, giving the central bank time to do work including finalising a rule book and selecting providers to develop a platform and infrastructure, it said.

The goal is to create a form of cash that can be used for all forms of payment in Europe and it will be free for private users, it said.

Our Governing Council has decided to move to the next phase of the digital euro project.

In November 2023 we will start laying the foundation for the possible issuance of a digital euro. A decision on issuing a digital euro will come at a later stage.https://t.co/xuKklame0U pic.twitter.com/Nn0Z8RggVn

— European Central Bank (@ecb) October 18, 2023

What makes the digital euro different from other central bank digital currencies (CBDCs) is its range of features. It will “be used from person to person, at the point of sale, in e-commerce and in government transactions,” the ECB said. This will make it the only digital form of payment that has such a high degree of utility, it said.

An Emphasis on Privacy and Security

The main motivation behind the digital euro is to develop the national currency of the future, said ECB president Christine Lagarde.

The digital currency “would coexist alongside physical cash, which will always be available, leaving no one behind,” she said, adding that it will emphasize privacy and security and be governed by strict rules.

With a #digitaleuro, you would have an additional payment option that combines the advantages of central bank money with the ease and practicality of modern digital payments.

What’s in it for you? Find out more https://t.co/hsPwv8ADB6 pic.twitter.com/k86Q9oYvni

— European Central Bank (@ecb) October 19, 2023

Digital Euro Not Confirmed Yet

The digital euro project’s transition into the preparation phase does not serve as a definitive decision to issue a digital euro. The Governing Council has stipulated that it will only consider rolling out a digital euro following the completion of the European Union’s legislative process.